Capital Vol. III

Part VI. Transformation of Surplus-Profit into Ground-Rent

Chapter 37. Introduction

The analysis of landed property in its various historical forms is beyond the scope of this work. We shall be concerned with it only in so far as a portion of the surplus-value produced by capital falls to the share of the landowner. We assume, then, that agriculture is dominated by the capitalist mode of production just as manufacture is; in other words, that agriculture is carried on by capitalists who differ from other capitalists primarily in the manner in which their capital, and the wage-labour set in motion by this capital, are invested. So far as we are concerned, the farmer produces wheat, etc., in much the same way as the manufacturer produces yarn or machines. The assumption that the capitalist mode of production has encompassed agriculture implies that it rules over all spheres of production and bourgeois society, i.e., that its prerequisites, such as free competition among capitals, the possibility of transferring the latter from one production sphere to another, and a uniform level of the average profit, etc., are fully matured. The form of landed property which we shall consider here is a specifically historical one a form transformed through the influence of capital and of the capitalist mode of production, either of feudal landownership, or of small-peasant agriculture as a means of livelihood, in which the possession of the land and the soil constitutes one of the prerequisites of production for the direct producer, and in which his ownership of land appears as the most advantageous condition for the prosperity of his mode of production. Just as the capitalist mode of production in general is based on the expropriation of the conditions of labour from the labourers, so does it in agriculture presuppose the expropriation of the rural labourers from the land and their subordination to a capitalist, who carries on agriculture for the sake of profit. Thus, for the purpose of our analysis, the objection that other forms of landed property and of agriculture have existed, or still exist, is quite irrelevant. Such an objection can only apply to those economists who treat the capitalist mode of production in agriculture, and the form of landed property corresponding to it, not as historical but rather as eternal categories.

For our purposes it is necessary to study the modern form of landed property, because our task is to consider the specific conditions of production and circulation which arise from the investment of capital in agriculture. Without this, our analysis of capital would not be complete. We therefore confine ourselves exclusively to the investment of capital in agriculture itself, that is, in producing the principal agricultural crop which feeds a given people. We can use wheat for this purpose, because it is the principal means of subsistence in modern capitalistically developed nations. (Or, instead of agriculture, we can use mining because the laws are the same for both.)

One of the big contributions of Adam Smith was to have shown that ground-rent for capital invested in the production of such agricultural products as flax and dye-stuffs, and in independent cattle-raising, etc., is determined by the ground-rent obtained from capital invested in the production of the principal article of subsistence. [Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Aberdeen, London, 1848, pp. 105-16. — Ed.] In fact, no further progress has been made in this regard since then. Any limitations or additions would belong in an independent study of landed property, not here. Hence, we shall not speak of landed property ex professo — in so far as it does not refer to land destined for wheat production — but shall merely refer to it on occasion by way of illustration.

It should be noted for the sake of completeness that we also include water, etc., in the term land, in so far as it belongs to someone as an accessory to the land.

Landed property is based on the monopoly by certain persons over definite portions of the globe, as exclusive spheres of their private will to the exclusion of all others.[26] With this in mind, the problem is to ascertain the economic value, that is, the realisation of this monopoly on the basis of capitalist production. With the legal power of these persons to use or misuse certain portions of the globe, nothing is decided. The use of this power depends wholly upon economic conditions, which are independent of their will. The legal view itself only means that the landowner can do with the land what every owner of commodities can do with his commodities. And this view, this legal view of free private ownership of land, arises in the ancient world only with the dissolution of the organic order of society, and in the modern world only with the development of capitalist production. It has been imported by Europeans to Asia only here and there. In the section dealing with primitive accumulation (Buch I, Kap. XXIV [English edition: Part VIII. — Ed].), we saw that this mode of production presupposes, on the one hand, the separation of the direct producers from their position as mere accessories to the land (in the form of vassals, serfs, slaves, etc.), and, on the other hand, the expropriation of the mass of the people from the land. To this extent the monopoly of landed property is a historical premise, and continues to remain the basis of the capitalist mode of production, just as in all previous modes of production which are based on the exploitation of the masses in one form or another. But the form of landed property with which the incipient capitalist mode of production is confronted does not suit it. It first creates for itself the form required by subordinating agriculture to capital. It thus transforms feudal landed property, clan property, small peasant property in mark communes — no matter how divergent their juristic forms may be — into the economic form corresponding to the requirements of this mode of production. One of the major results of the capitalist mode of production is that, on the one hand, it transforms agriculture from a mere empirical and mechanical self-perpetuating process employed by the least developed part of society into the conscious scientific application of agronomy, in so far as this is at all feasible under conditions of private property;[27] that it divorces landed property from the relations of dominion and servitude, on the one hand, and, on the other, totally separates land as an instrument of production from landed property and landowner — for whom the land merely represents a certain money assessment which he collects by virtue of his monopoly from the industrial capitalist, the capitalist farmer; it dissolves the connection between landownership and the land so thoroughly that the landowner may spend his whole life in Constantinople, while his estates lie in Scotland. Landed property thus receives its purely economic form by discarding all its former political and social embellishments and associations, in brief all those traditional accessories, which are denounced, as we shall see later, as useless and absurd superfluities by the industrial capitalists themselves, as well as their theoretical spokesmen, in the heat of their struggle with landed property. The rationalising of agriculture, on the one hand, which makes it for the first time capable of operating on a social scale, and the reduction ad absurdum of property in land, on the other, are the great achievements of the capitalist mode of production. Like all of its other historical advances, it also attained these by first completely impoverishing the direct producers.

Before we proceed to the problem itself, several more preliminary remarks are necessary to avoid misunderstanding.

The prerequisites for the capitalist mode of production therefore are the following: The actual tillers of the soil are wage labourers employed by a capitalist, the capitalist farmer who is engaged in agriculture merely as a particular field of exploitation for capital, as investment for his capital in a particular sphere of production. This capitalist farmer pays the landowner, the owner of the land exploited by him, a sum of money at definite periods fixed by contract, for instance, annually (just as the borrower of money-capital pays a fixed interest), for the right to invest his capital in this specific sphere of production. This sum of money is called ground-rent, no matter whether it is paid for agricultural land, building lots, mines, fishing grounds, or forests, etc. It is paid for the entire time for which the landowner has contracted to rent his land to the capitalist farmer. Ground-rent, therefore, is here that form in which property in land is realised economically, that is, produces value. Here, then, we have all three classes — wage-labourers, industrial capitalists, and landowners constituting together, and in their mutual opposition, the framework of modern society.

Capital may be fixed in the land, incorporated in it either in a transitory manner, as through improvements of a chemical nature, fertilisation, etc., or more permanently, as in drainage canals, irrigation works, leveling, farm buildings, etc. Elsewhere I have called the capital thus applied to land la terre-capital.[28] It belongs to the category of fixed capital. The interest on capital incorporated in the land and the improvements thus made in it as an instrument of production can constitute a part of the rent paid by the capitalist farmer to the landowner, [29] but it does not constitute the actual ground-rent, which is paid for the use of the land as such — be it in a natural or cultivated state. In a systematic treatment of landed property, which is not within our scope, this part of the landowner's revenue would have to be discussed at length. But a few words about it will suffice here. The more transitory capital investments, which accompany the ordinary production processes in agriculture, are all made without exception by the capitalist farmer. These investments, like cultivation proper in general, improve the land,[30] increase its output, and transform the land from mere material into land-capital when the cultivation is carried on more or less rationally, i.e., when it is not reduced to a brutal spoliation of the soil, as was in vogue, e.g., among the former slave-holders in the United States; however, the gentlemen landowners secure themselves against such practice by contract. A cultivated field is worth more than an uncultivated one of the same natural quality. The more permanent fixed capital investments, which are incorporated in the soil and used up in a longer period of time, are also in the main, and in some spheres often exclusively, made by the capitalist farmer. But as soon as the time stipulated by contract has expired — and this is one of the reasons why with the development of capitalist production the landowners seek to shorten the contract period as much as possible — the improvements incorporated in the soil become the property of the landowner as an inseparable feature of the substance, the land. In the new contract made by the landowner he adds the interest for capital incorporated in the land to the ground-rent itself. And he does this whether he now leases the land to the capitalist farmer who made these improvements or to some other farmer. His rent is thus inflated; and should he wish to sell his land (we shall see immediately how its price is determined), its value is now higher. He sells not merely the land but the improved land, the capital incorporated in the land for which he paid nothing. Quite aside from the movements of ground-rent itself, here lies one of the secrets of the increasing enrichment of landowners, the continuous inflation of their rents, and the constantly growing money-value of their estates along with progress in economic development. Thus they pocket a product of social development created without their help — fruges consumere nati. [Horace, Epistles, Book I, Epistles 2, 27. — Ed]. But this is at the same time one of the greatest obstacles to a rational development of agriculture, for the tenant farmer avoids all improvements and outlays for which he cannot expect complete returns during the term of his lease. We find this situation denounced as such an obstacle again and again, not only in the 18th century by James Anderson, the actual discoverer of the modern theory of rent [On J. Anderson's theory of rent see K. Marx, Theorien über den Mehrwert (K. Marx/F. Engels, Werke, Band 26, 2. Teil, S. 103-05, 110-14, 134-39). — Ed.] — who was also a practical capitalist farmer and an advanced agronomist for his time — but also in our own day by opponents of the present constitution of landed property in England.

A.A. Walton, in his History of the Landed Tenures of Great Britain and Ireland, London, 1865, says on this score (pp.96, 97):

"All the efforts of the numerous agricultural associations throughout the country must fail to produce any very extensive or really appreciable results in the real advancement of agricultural improvement, so long as such improvements mean in a far higher degree increased value to the estate and rent-roll of the landlord, than bettering the condition of the tenant farmer or the labourer. The farmers, generally, are as well aware as either the landlord or his agent, or even the president of the Agricultural Association, that good drainage, plenty of manure, and good management, combined with the increased employment of labour, to thoroughly cleanse and work the land, will produce wonderful results both in improvement and production. To do all this, however, considerable outlay is required, and the farmers are also aware, that however much they may improve the land or enhance its value, the landlords will, in the long run, reap the principal benefit, in higher rents and the increased value of their estates.... They are shrewd enough to observe what those orators” [landowners and their agents speaking at agricultural festivities], "by some singular inadvertence, omit to tell them —namely, that the lion's share of any improvements they may make is sure to go into the pockets of the landlords in the long run.... However much the former tenant may have improved the farm, his successor will find that the landlord will always increase the rent in proportion to the increased value of the land from former improvements.”

In agriculture proper this process does not yet appear quite as plainly as when the land is used for building purposes. By far the largest portion of land used in England for building purposes but not sold as a freehold is leased by the landowners for 99 years or, if possible, for a shorter term. After the lapse of this period the buildings fall into the hands of the landowner together with the land itself.

"They” [the tenants] "are bound to deliver up the house at the expiration of the lease, in good tenantable condition, to the great landlord, after having paid an exorbitant ground-rent up to the expiration of the lease. No sooner is the lease expired, than the agent or surveyor will come and examine your house, and see that you put it into good repair, and then take possession of it, and annex it to his lord's domains.... The fact is, if this system is permitted to be in full operation for any considerable period longer, the whole of the house property in the kingdom will be in the hands of the great landlords, as well as the land. The whole of the West End of London, north and south from Temple Bar, may be said to belong to about half a dozen great landlords, all let at enormous rents, and where the leases have not quite expired they are fast falling due. The same may be said either more or less of every town in the kingdom. Nor does this grasping system of exclusion and monopoly stop even here. Nearly the whole of the dock accommodation in our seaport towns is by the same process of usurpation in the hands of the great leviathans of the land” (1. c., pp.92-93).

It is evident in these circumstances that when the census for England and Wales in 1861 gives the total population as 20,066,224 and the number of landlords as 36,032, the proportion of owners to the number of houses and to population would look completely different if the large landlords were placed on one side and the small ones on the other.

This illustration of ownership in buildings is important. In the first place, it clearly shows the difference between actual ground-rent and interest on fixed capital incorporated in the land, which may constitute an addition to ground-rent. Interest on buildings, like that on capital incorporated in the land by the tenant in agriculture, falls into the hands of the industrial capitalist, the building speculator, or the tenant, so long as the lease lasts, and has in itself nothing to do with ground-rent, which must be paid on stated dates annually for the use of the land. Secondly, it shows that capital incorporated in the land by others ultimately passes into the hands of the landlord together with the land, and that the interest for it inflates his rent.

Some writers, acting either as spokesmen of landlordism and taking up the cudgels against the attacks of bourgeois economists, or in an endeavour to transform the capitalist system of production from a system of contradictions into one of "harmonies," like Carey, have tried to represent ground-rent, the specific economic expression of landed property, as identical with interest. This would eliminate the opposition between landlords and capitalists. The opposite method was employed in the early stages of capitalist production. In those days, landed property was still regarded by popular conception as the pristine and respectable form of private property, while interest on capital was decried as usury. Dudley North, Locke and others, therefore, represented interest on capital as a form analogous to ground-rent, just as Turgot deduced the justification for interest from the existence of ground-rent. — Aside from the fact that ground-rent may, and does, exist in its pure form without any addition for interest on capital incorporated in the land, those more recent writers forget that, in this way, the landlord not only receives interest on other persons' capital that costs him nothing, but also pockets this capital of others without recompense. The justification of landed property, like that of all other forms of property corresponding to a certain mode of production, is that the mode of production itself is a transient historical necessity, and this includes the relations of production and exchange which stem from it. It is true, as we shall see later, that landed property differs from other kinds of property in that it appears superfluous and harmful at a certain stage of development, even from the point of view of the capitalist mode of production.

Ground-rent may in another form be confused with interest and thereby its specific character overlooked. Ground-rent assumes the form of a certain sum of money, which the landlord draws annually by leasing a certain plot on our planet. We have seen that every particular sum of money may be capitalised, that is, considered as the interest on an imaginary capital. For instance, if the average rate of interest is 5%, then an annual ground-rent of £200 may be regarded as interest on a capital of £4,000. Ground-rent so capitalised constitutes the purchase price or value of the land, a category which like the price of labour is prima facie irrational, since the earth is not the product of labour and therefore has no value. But on the other hand, a real relation in production is concealed behind this irrational form. If a capitalist buys land yielding a rent of £200 annually and pays £4,000 for it, then he draws the average annual interest of 5% on his capital of £4,000, just as if he had invested this capital in interest-bearing papers or loaned it directly at 5% interest. It is the expansion of a capital of £4,000 at 5%. On this assumption, he would recover the purchase price of his estate through its revenues in twenty years. In England, therefore, the purchase price of land is calculated in so many years' purchase which is merely another way of expressing the capitalisation of ground-rent. It is in fact the purchase price-not of the land, but of the ground-rent yielded by it — calculated in accordance with the usual interest rate. But this capitalisation of rent assumes the existence of rent, while rent cannot inversely be derived and explained from its own capitalisation. Its existence, independent of its sale, is rather the starting-point for the inquiry.

It follows, then, that the price of land may rise or fall inversely as the interest rate rises or falls if we assume ground-rent to be a constant magnitude. If the ordinary interest rate should fall from 5% to 4%, then the annual ground-rent of £200 would represent the annual realisation from a capital of £5,000 instead of £4,000. The price of the same piece of land would thus have risen from £4,000 to £5,000, or from 20 years' to 25 years' purchase. The converse would take place in the opposite case. This is a movement of the price of land which is independent of the movement of ground-rent itself and regulated only by the interest rate. But as we have seen that the rate of profit has a tendency to fall in the course of social progress, and, therefore, the interest rate has the same tendency, so far as it is regulated by the rate of profit; and that, furthermore, the interest rate shows a tendency to fall in consequence of the growth of loanable capital, apart from the influence of the rate of profit, it follows that the price of land has a tendency to rise, even independently of the movement of ground-rent and the prices of the products of the land, of which rent constitutes a part.

The confusion of ground-rent itself with the interest form which it assumes for the buyer of the land — a confusion resulting from complete lack of familiarity with the nature of ground-rent — must necessarily lead to the most absurd conclusions. Since landed property is considered in all ancient countries as a particularly genteel form of property, and its purchase also as an eminently safe capital investment, the interest rate at which ground-rent is bought is generally lower than that of other long-term investments of capital, so that a buyer of real estate draws, for instance, only 4% on his purchase price, whereas he would draw 5% for the same capital in other investments. In other words, he pays more capital for ground-rent than he would for the same annual amount of income from other investments. This leads Mr. Thiers to conclude in his generally very poor work on La Propriété (a reprint of his speech in the French National Assembly in 1849 directed against Proudhon) [Proudhon's speech was published in "Compte rendu des seances de l'Assemblée Nationale,” Tome II, Paris, 1849, pp. 666-71. — Ed.] that ground-rent is low, whereas it merely proves that its purchase price is high.

The fact that capitalised ground-rent appears as the price or value of land, so that land, therefore, is bought and sold like any other commodity, serves some apologists as a justification for landed property since the buyer pays an equivalent for it, the same as for other commodities; and the major portion of landed property has changed hands in this way. The same reason in that case would also serve to justify slavery, since the returns from the labour of the slave, whom the slave-holder has bought, merely represent the interest on the capital invested in this purchase. To derive a justification for the existence of ground-rent from its sale and purchase means in general to justify its existence by its existence.

As important as it may be for a scientific analysis of ground-rent — that is, the independent and specific economic form of landed property on the basis of the capitalist mode of production — study it in its pure form free of all distorting and obfuscating irrelevancies, it is just as important for an understanding of the practical effects of landed property even for a theoretical comprehension of a multitude of facts which contradict the concept and nature of ground-rent and yet appear as modes of existence of ground-rent — to learn the sources which give rise to such muddling in theory.

In practice, naturally, everything appears as ground-rent that is paid as lease money by tenant to landlord for the right to cultivate the soil. No matter what the composition of this tribute and no matter what its sources, it has this in common with the actual ground-rent — that the monopoly of the so-called landed proprietor of a portion of our planet enables him to levy such tribute and impose such an assessment. It has this in common with the actual ground-rent — that it determines the price of land, which, as we have indicated earlier, is nothing but the capitalised income from the lease of the land.

We have already seen that interest for the capital incorporated in the land may constitute such an extraneous component of ground-rent, a component which must become a continually growing extra charge on the total rent of a country as economic development progresses. But aside from this interest, it is possible that the lease money may conceal in part, and in certain cases in its entirety, i.e., in complete absence of the actual ground-rent when the land is, therefore, actually worthless — a deduction from the average profit or from the normal wages, or both. This portion, whether of profit or wages, appears here as ground-rent, because instead of falling to the industrial capitalist or the wage-worker, as would normally be the case, it is paid to the landlord in the form of lease money. Economically speaking, neither the one nor the other of these portions constitutes ground-rent; but, in practice, it constitutes the landlord's revenue, an economic realisation of his monopoly, much as actual ground-rent, and it has just as determining an influence on land prices.

We are not speaking now of conditions in which ground-rent, the manner of expressing landed property in the capitalist mode of production, formally exists without the existence of the capitalist mode of production itself, i.e., without the tenant himself being an industrial capitalist, nor the type of his management being a capitalist one. Such is the case, e.g., in Ireland. The tenant there is generally a small farmer. What he pays to the landlord in the form of rent frequently absorbs not merely a part of his profit, that is, his own surplus labour (to which he is entitled as possessor of his own instruments of labour), but also a part of his normal wage, which he would otherwise receive for the same amount of labour. Besides, the landlord, who does nothing at all for the improvement of the land, also expropriates his small capital, which the tenant for the most part incorporates in the land through his own labour. This is precisely what a usurer would do under similar circumstances, with just the difference that the usurer would at least risk his own capital in the operation. This continual plunder is the core of the dispute over the Irish Tenancy Rights Bill. The main purpose of this Bill is to compel the landlord when ordering his tenant off the land to indemnify the latter for his improvements on the land, or for his capital incorporated in the land. Palmerston used to wave this demand aside with the cynical answer;

"The House of Commons is a house of landed proprietors.”

Nor are we referring to exceptional circumstances in which the landlord may enforce a high rental — even in countries with capitalist production — that stands in no relation to the yield from the soil. Of such a nature, for example, is the leasing of small patches of land to labourers in English factory districts, either as small gardens or for amateur spare-time farming. (Reports of Inspectors of Factories.)

We are referring to ground-rent in countries with developed capitalist production. Among English tenants, for instance, there are a number of small capitalists who are destined and compelled by education, training, tradition, competition, and other circumstances to invest their capital as tenants in agriculture. They are forced to be satisfied with less than the average profit, and to turn over part of it to the landlords as rent. This is the only condition under which they are permitted to invest their capital in the land, in agriculture. Since landlords everywhere exert considerable, and in England even overwhelming, influence on legislation, they are able to exploit this situation for the purpose of victimising the entire class of tenants. For instance, the Corn Laws of 1815 — a bread tax, admittedly imposed upon the country to secure for the idle landlords a continuation of their abnormally increased rentals during the anti-Jacobin war — had indeed the effect, excluding cases of a few extraordinarily rich harvests, of maintaining prices of agricultural products above the level to which they would have fallen had corn imports been unrestricted. But they did not have the effect of maintaining prices at the level decreed by the lawmaking landlords to serve as normal prices in such manner as to constitute the legal limit for imports of foreign corn. But the leaseholds were contracted in an atmosphere created by these normal prices. As soon as the illusion was dispelled, a new law was passed, containing new normal prices, which were as much the impotent expression of a greedy landlord's fantasy as the old ones. In this way, tenants were defrauded from 1815 up to the thirties. Hence the standing problem of agricultural distress during this entire period. Hence the expropriation and the ruin of a whole generation of tenants during this period and their replacement by a new class of capitalists.[31]

A much more general and important fact, however, is the depression of the actual farm-labourer's wage below its normal average, so that part of it is deducted to become part of the lease money and thus, in the guise of ground-rent, it flows into the pocket of the landlord rather than the labourer. This is, for example, quite generally the case in England and Scotland, with the exception of a few favourably situated counties. The inquiries into the level of wages by the parliamentary investigating committees, which were appointed before the passage of the Corn Laws in England — so far the most valuable and almost unexploited contributions to the history of wages in the 19th century, and at the same time a pillory erected for themselves by the English aristocracy and bourgeoisie — proved convincingly and beyond a doubt that the high rates of rent, and the corresponding rise in land prices during the anti-Jacobin war, were due in part to no other cause but deductions from wages and their depression to a level that was even below the physical minimum requirement; in other words, to part of the normal wage being handed over to the landlords. Various circumstances, such as the depreciation of money and the manipulation of the Poor Laws in the agricultural districts, had made this operation possible at a time when the incomes of the tenants were enormously increasing and the landlords were amassing fabulous riches. Indeed, one of the main arguments of both tenants and landlords for the introduction of duties on corn was that it was physically impossible to depress farm labourers' wages any lower. This state of affairs has not significantly changed, and in England, as in all European countries, a portion of the normal wage is absorbed by ground-rent just as ever. When Count Shaftesbury, then Lord Ashley, one of the philanthropic aristocrats, was so extraordinarily moved by the condition of English factory operatives and acted as their spokesman in Parliament during the agitation for a ten-hour day, the spokesmen of the industrialists took their revenge by publishing wage statistics of agricultural labourers in the villages belonging to him (see Buch I, Kap. XXIII, 5, e [English edition: Ch XXV 5 e — Ed])("The British Agricultural Proletariat"), which clearly showed that a portion of the ground-rent of this philanthropist consisted of loot filched for him by his tenants out of the wages of agricultural labourers. This publication is also interesting for the fact that its revelations may bravely take their place beside the worst exposures made by the committees in 1814 and 1815. As soon as circumstances force a temporary increase in the wage of agricultural labourers a cry goes up from the capitalist tenant farmers that raising wages to the normal level, as done in other branches of industry, would be impossible and would ruin them, unless ground-rent were reduced at the same time. Therein lies the confession that under the head of ground-rent there is a deduction of the labourers' wages which is handed over to the landlords. For instance, from 1849 to 1859 the wages of agricultural labourers rose in England through a combination of momentous events: the exodus from Ireland, which cut off the supply of agricultural labourers coming from there; an extraordinary absorption of the agricultural population by factories; a war-time demand for soldiers; an exceptionally large emigration to Australia and the United States (California), and other circumstances which need not be dwelt upon here. At the same time, average prices of grain fell by more than 16% during this period, with the exception of the poor agricultural years 1854 to 1856. The tenant farmers clamoured for a reduction in rents. They were successful in individual cases, but on the whole failed to achieve this demand. They had recourse to a reduction of production costs, among other things by the mass production of steam-engines and new machinery, which to some extent replaced horses and pushed them out of the economy, but also brought about, in part, an artificial over-population by throwing agricultural day-labourers out of work, and thereby caused a new drop in wages. And this took place in spite of the overall relative decrease in agricultural population during that decade as compared with the growth of total population, and in spite of an absolute decrease in agricultural population in some purely agricultural districts.[32] Thus Fawcett, then professor of political economy at Cambridge [who died in 1884 while Postmaster General], stated at the Social Science Congress on October 12, 1865:

"The labourers were beginning to emigrate, and the farmers were already beginning to complain that they would not be able to pay such high rents as they have been accustomed to pay, because labour was becoming dearer in consequence of emigration."

Here, then, high ground-rent is directly identified with low wages. And in so far as the level of land prices is determined by this circumstance-increasing rent — a rise in the value of land is identical with a depreciation of labour, the high price of land is identical with the low price of labour.

The same is true of France.

"The rental rises because the prices of bread, wine, meat, vegetables and fruit rise, on the one hand, while, on the other hand, the price of labour remains unchanged. If the older people examine the accounts of their fathers, taking us back about 100 years, they will find that the price of a day's labour in rural France was the same as it is now. The price of meat has trebled since then.... Who is the victim of this revolution? Is it the rich man, who is the proprietor of an estate, or the poor man who works it? ... The increase in rental is evidence of a public disaster.” (Du Mécanisime de la Société en France et en Angleterre, by M. Rubichon, 2nd ed., Paris, 1837, p. 101.)

Illustrations of rent representing deductions, on the one hand, from average profit and, on the other, from average wages:

Morton, [Here Marx quotes John Lockart Morton. — Ed.] real estate agent and agricultural mechanic who was previously quoted, states that it has been observed in many localities that rent for large estates is lower than for small ones because

"the competition is usually greater for the latter than for the former, and as few small farmers are able to turn their attention to any other business than that of farming, their anxiety to get a suitable occupation leads them in many instances to give more rent than their judgement can approve of." (John L. Morton, The Resources of Estates, London, 1858, p. 116.)

However, this difference is supposed to be gradually disappearing in England; this he attributes largely to the emigration precisely of the class of small tenants. The same Morton illustrates with an example in which clearly the wage of the tenant himself, and even more surely that of his labourers, suffers a deduction for ground-rent. This takes place in the case of leaseholds with less than 70 to 80 acres (30-34 ha.) where a two-horse plough cannot be maintained.

"Unless the tenant works with his own hands as laboriously as any labourer, his farm will not keep him. If he entrusts the performance of his work to workmen while he continues merely to observe them, the chances are, that at no distant period, he will find he is unable to pay his rent" (1. c., p. 148). Morton concludes, therefore, that unless the tenants of a certain locality are very poor, the leaseholds should not be smaller than 70 acres, so that the tenants may keep two or three horses.

Extraordinary sagacity on the part of Monsieur Léonce de Lavergne, Membre de l'Institut et de la Société Centrale d'Agriculture. In his Economie Rurale de l'Angleterre (quoted from the English translation, London, 1855), he makes the following comparison of the annual advantage derived from cattle which is employed in France but not in England where it is replaced by horses (p.42):

FRANCE Milk £4 million ENGLAND Milk £16 million
  Meat £16 million   Meat £20 million
  Labour £8 million Labour
  TOTAL: £28 million TOTAL: £36 million

But the greater total for England is obtained here because according to his own testimony milk is twice as expensive in England as in France whereas he assumes the same prices for meat in both countries (p.35); therefore, English milk production shrinks to £8 million and the total to £28 million, which is the same as in France. It is indeed rather too much when Mr. Lavergne allows the quantities and price differences to enter simultaneously into his calculations so that when England produces certain articles more dearly than France — this appears to be an advantage of English agriculture, whereas at best it signifies a larger profit for the tenants and landlords.

That Mr. Lavergne is not only familiar with the economic achievements of English agriculture, but also subscribes to the prejudices of the English tenants and landlords, is shown on page 48:

"One great drawback attends cereals generally ... they exhaust the soil which bears them."

Not only does Mr. Lavergne believe that other plants do not do so, but also believes that fodder crops and root crops enrich the soil:

"Forage plants derive from the atmosphere the principal elements of their growth, while they give to the soil more than they take from it; thus both directly and by their conversion into animal manure contributing in two ways to repair the mischief done by cereals and exhausting crops generally; one principle, therefore, is that they should at least alternate with these crops; in this consists the Norfolk rotation" (pp. 50, 51).

No wonder that Mr. Lavergne, who believes these English rustic fairy-tales, also believes that the wages of English farm labourers have lost their former abnormality since the duties on corn have been lifted. (See what has been previously said on this point. Buch I, Kap. XXIII, 5, pp.704 to 729. [English edition: Ch. XXV, 5, pp. 673-96. — Ed.] But let us also listen to Mr. John Bright's speech in Birmingham, December 14, 1865. After mentioning the 5 million families entirely unrepresented in Parliament, he continues:

"There is among them one million, or rather more than one million, in the United Kingdom who are classed in the unfortunate list of paupers. There is another million just above pauperism, but always in peril lest they should become paupers. Their condition and prospects are not more favourable than that. Now look at the ignorant and lower strata of this portion of the community. Look to their abject condition, to their poverty, to their suffering, to their utter hopelessness of any good. Why, in the United States — even in the Southern States during the reign of slavery every Negro had an idea that there was a day of jubilee for him. But to these people — to this class of the lowest strata in this country — I am here to state that there is neither the belief of anything better nor scarcely an aspiration after it. Have you read a paragraph which lately appeared in the newspapers about John Cross, a Dorsetshire labourer? He worked six days in the week, had an excellent character from his employer for whom he had worked twenty-four years at the rate of eight shillings per week. John Cross had a family of seven children to provide for out of these wages in his hovel — for a feeble wife and an infant child. He took — legally, I believe he stole — a wooden hurdle of the value of sixpence. For this offence he was tried before the magistrates and sentenced to 14 or 20 days' imprisonment.... I can tell you that many thousands of cases like that of John Cross are to be found throughout the country, and especially in the south, and that their condition is such that hitherto the most anxious investigator has been unable to solve the mystery as to how they keep body and soul together. Now cast your eye over the country and look at these five million of families and the desperate condition of this strata of them. Is it not true that the unenfranchised nation may be said to toil and toil and knowing almost no rest? Compare it with the ruling class — but if I do I shall be charged with communism.... But compare this great toiling and unenfranchised nation with the section who may be considered the governing classes. Look at its wealth; look at its ostentation — look at its luxury. Behold its weariness — for there is weariness amongst them, but it is the weariness of satiety — and see how they rush from place to place, as it were, to discover some new pleasure." (Morning Star, December 14, 1865.)

It is shown in what follows how surplus-labour, and consequently surplus-product, is generally confused with ground-rent that qualitatively and quantitatively specifically determined, at least on the basis of the capitalist mode of production, part of the surplus-product. The natural basis of surplus-labour in general, that is, a natural prerequisite without which such labour cannot be performed, is that Nature must supply — in the form of animal or vegetable products of the land, in fisheries, etc. — the necessary means of subsistence under conditions of an expenditure of labour which does not consume the entire working day. This natural productivity of agricultural labour (which includes here the labour of simple gathering, hunting, fishing and cattle-raising) is the basis of all surplus-labour, as all labour is primarily and initially directed toward the appropriation and production of food. (Animals also supply at the same time skins for warmth in colder climates; also cave-dwellings, etc.)

The same confusion between surplus-product and ground-rent is found differently expressed by Mr. Dove. [P. Dove, The Elements of Political Science, Edinburgh, 1854, pp.264, 273. — Ed.] Originally agricultural and industrial labour were not separated; the latter was an adjunct of the former. The surplus-labour and the surplus-product of the land-cultivating tribe, house commune, or family included both agricultural and industrial labour. Both went hand in hand. Hunting, fishing and agriculture were impossible without suitable tools. Weaving, spinning, etc., were first carried on as an agrarian side line.

We have previously shown that just as the labour of an individual workman breaks up into necessary and surplus labour, the aggregate labour of the working-class may be so divided that the portion which produces the total means of subsistence for the working-class (including the means of production required for this purpose) performs the necessary labour for the whole of society. The labour performed by the remainder of the working-class may then be regarded as surplus labour. But the necessary labour consists by no means only of agricultural labour, but also of that labour which produces all other products necessarily included in the average consumption of the labourer. Furthermore, from the social standpoint, some perform only necessary labour because others perform only surplus labour, and vice versa. It is but a division of labour between them. The same holds for the division of labour between agricultural and industrial labourers in general. The purely industrial character of labour, on the one hand, corresponds to the purely agricultural character on the other. This purely agricultural labour is by no means natural, but is rather a product — and a very modern one at that, which has not yet been achieved everywhere — of social development and corresponds to a very definite stage of the development of production. Just as a portion of agricultural labour is materialised in products which either minister only to luxury or serve as raw materials in industry, but by no means serve as food, let alone as food for the masses, so on the other hand a portion of industrial labour is materialised in products which serve as necessary means of consumption for both agricultural and nonagricultural labourers. It is a mistake, from a social point of view, to regard this industrial labour as surplus-labour. It is, in part, as much necessary labour as the necessary portion of the agricultural labour. It is also but a form rendered independent of a part of industrial labour which was formerly naturally connected with agricultural labour, a necessary mutual supplement to the specifically agricultural labour now separated from it. (From a purely material point of view, 500 mechanical weavers, e.g., produce surplus-fabrics to a far greater degree, that is, more than is required for their own clothing.)

Finally, it should be borne in mind in considering the various forms of manifestation of ground-rent, that is, the lease money paid under the heading of ground-rent to the landlord for the use of the land for purposes of production or consumption, that the price of things which have in themselves no value, i.e., are not the product of labour, such as land, or which at least cannot be reproduced by labour, such as antiques and works of art by certain masters, etc., may be determined by many fortuitous combinations. In order to sell a thing, nothing more is required than its capacity to be monopolised and alienated.

There are three main errors to be avoided in studying ground-rent, and which obscure its analysis.

1) Confusing the various forms of rent pertaining to different stages of development of the social production process.

Whatever the specific form of rent may be, all types have this in common: the appropriation of rent is that economic form in which landed property is realised, and ground-rent, in turn, presupposes the existence of landed property, the ownership of certain portions of our planet by certain individuals. The owner may be an individual representing the community, as in Asia, Egypt, etc.; or this landed property may be merely incidental to the ownership of the immediate producers themselves by some individual as under slavery or serfdom; or it may be a purely private ownership of Nature by non-producers, a mere title to land; or, finally, it may be a relationship to the land which, as in the case of colonists and small peasants owning land, seems to be directly included — in the isolated and not socially developed labour — in the appropriation and production of the products of particular plots of land by the direct producers.

This common element in the various forms of rent, namely that of being the economic realisation of landed property, of legal fiction by grace of which certain individuals have an exclusive right to certain parts of our planet — makes it possible for the differences to escape detection.

2) All ground-rent is surplus-value, the product of surplus-labour. In its undeveloped form as rent in kind it is still directly the surplus-product itself. Hence, the mistaken idea that the rent corresponding to the capitalist mode of production — which is always a surplus over and above profit, i.e., above a value portion of commodities which itself consists of surplus-value (surplus-labour) — that this special and specific component of surplus-value is explained by merely explaining the general conditions for the existence of surplus-value and profit in general. These conditions are: the direct producers must work beyond the time necessary for reproducing their own labour-power, for their own reproduction. They must perform surplus-labour in general. This is the subjective condition. The objective condition is that they must be able to perform surplus-labour. The natural conditions must be such that a part of their available labour-time suffices for their reproduction and self-maintenance as producers, that the production of their necessary means of subsistence shall not consume their whole labour-power. The fertility of Nature establishes a limit here, a starting-point, a basis. On the other hand, the development of the social productive power of their labour forms the other limit. Examined more closely, since the production of means of subsistence is the very first condition of their existence and of all production in general, labour used in this production, that is, agricultural labour in the broadest economic sense, must be fruitful enough so as not to absorb the entire available labour-time in the production of means of subsistence for the direct producers, that is, agricultural surplus-labour and therefore agricultural surplus-product must be possible. Developed further, the total agricultural labour, both necessary and surplus labour, of a segment of society must suffice to produce the necessary subsistence for the whole of society, that is, for non-agricultural labourers too. This means therefore that the major division of labour between agricultural and industrial must be possible; and similarly between tillers of the soil producing means of subsistence and those producing raw materials. Although the labour of the direct producers of means of subsistence breaks up into necessary and surplus labour as far as they themselves are concerned, it represents from the social standpoint only the necessary labour required to produce the means of subsistence. Incidentally, the same is true for all division of labour within society as a whole, as distinct from the division of labour within individual workshops. It is the labour necessary for the production of particular articles, for the satisfaction of some particular need of society for these particular articles. If this division is proportional, then the products of various groups are sold at their values (at a later stage of development they are sold at their prices of production), or at prices which are certain modifications of these values or prices of production determined by general laws. It is indeed the effect of the law of value, not with reference to individual commodities or articles, but to each total product of the particular social spheres of production made independent by the division of labour; so that not only is no more than the necessary labour-time used up for each specific commodity, but only the necessary proportional quantity of the total social labour-time is used up in the various groups. For the condition remains that the commodity represents use-value. But if the use-value of individual commodities depends on whether they satisfy a particular need then the use-value of the mass of the social product depends on whether it satisfies the quantitatively definite social need for each particular kind of product in an adequate manner, and whether the labour is therefore proportionately distributed among the different spheres in keeping with these social needs, which are quantitatively circumscribed. (This point is to be noted in the distribution of capital among the various spheres of production.) The social need, that is, the use-value on a social scale, appears here as a determining factor for the amount of total social labour-time which is expended in various specific spheres of production. But it is merely the same law which is already applied in the case of single commodities, namely, that the use-value of a commodity is the basis of its exchange-value and thus of its value. This point has a bearing upon the relationship between necessary and surplus labour only in so far as a violation of this proportion makes it impossible to realise the value of the commodity and thus the surplus-value contained in it. For instance; let us assume that proportionally too much cotton goods have been produced, although only the labour-time necessary under the prevailing conditions is incorporated in this total cloth production. But in general too much social labour has been expended in this particular line; in other words, a portion of this product is useless. It is therefore sold solely as if it had been produced in the necessary proportion. This quantitative limit to the quota of social labour-time available for the various particular spheres of production is but a more developed expression of the law of value in general, although the necessary labour-time assumes a different meaning here. Only just so much of it is required for the satisfaction of social needs. The limitation occurring here is due to the use value. Society can use only so much of its total labour-time for this particular kind of product under prevailing conditions of production. But the subjective and objective conditions of surplus labour and surplus-value in general have nothing to do with the particular form of either the profit or the rent. These conditions apply to surplus-value as such, no matter what special form it may assume. Hence they do not explain ground-rent.

3) It is precisely in the economic realisation of landed property, in the development of ground-rent, that the following characteristic peculiarity comes to the fore, namely that its amount is by no means determined by the actions of its recipient, but is determined rather by the independent development of social labour in which the recipient takes no part. It may easily happen, therefore, that something is regarded as a peculiarity of rent (and of the products of agriculture in general), which is really a common feature of all branches of production and all their products where the basis is commodity-production — and, in particular, capitalist production, which is in its entirety commodity production.

The amount of ground-rent (and with it the value of land) grows with social development as a result of the total social labour. On the one hand, this leads to an expansion of the market and of the demand for products of the soil, and, on the other, it stimulates the demand for land itself, which is a prerequisite of competitive production in all lines of business activity, even those which are not agricultural. More exactly — if one considers only the actual agricultural rent — rent, and thereby the value of the land, develops with the market for the products of the soil, and thus with the increase in the non-agricultural population, with its need and demand for means of subsistence and raw materials. It is in the nature of capitalist production to continually reduce the agricultural population as compared with the non-agricultural, because in industry (in the strict sense) the increase of constant capital in relation to variable capital goes hand in hand with an absolute increase, though relative decrease, in variable capital; on the other hand, in agriculture the variable capital required for the exploitation of a certain plot of land decreases absolutely; it can thus only increase to the extent that new land is taken into cultivation, but this again requires as a prerequisite a still greater growth of the non-agricultural population.

In fact, we are not dealing here with a characteristic peculiarity of agriculture and its products. On the contrary, the same applies to all other branches of production and products where the basis is commodity-production and its absolute form, capitalist production.

These products are commodities, or use-values, which have an exchange-value that is to be realised, to be converted into money, only in so far as other commodities form an equivalent for them, that is, other products confront them as commodities and values; thus, in so far as they are not produced as immediate means of subsistence for the producers themselves, but as commodities, as products which become use-values only by their transformation into exchange-values (money), by their alienation. The market for these commodities develops through the social division of labour; the division of productive labours mutually transforms their respective products into commodities, into equivalents for each other, making them mutually serve as markets. This is in no way peculiar to agricultural products.

Rent can develop as money-rent only on the basis of commodity production, in particular capitalist production, and it develops to the same extent that agricultural production becomes commodity production, that is, to the same extent that non-agricultural production develops independently of agricultural production, for to that degree the agricultural product becomes commodity, exchange-value, and value. In so far as commodity-production and thus the production of value develops with capitalist production so does the production of surplus-value and surplus product. But in the same proportion as the latter develops, landed property acquires the capacity of capturing an ever-increasing portion of this surplus-value by means of its land monopoly and thereby, of raising the value of its rent and the price of the land itself. The capitalist still performs an active function in the development of this surplus-value and surplus-product. But the landowner need only appropriate the growing share in the surplus-product and the surplus-value, without having contributed anything to this growth. This is the characteristic peculiarity of his position, and not the fact that the value of the products of the land, and thus of the land itself, increases to the degree that the market for them expands, the demand grows and with it the world of commodities which confronts the products of the land — in other words, the mass of non-agricultural commodity producers and non-agricultural commodity-production. But since this takes place without any action on his part, it appears to him as something unique that the mass of value, the mass of surplus-value, and the transformation of a portion of surplus value into ground-rent should depend upon the social production process, on the development of commodity-production in general. For this reason, Dove, for instance, tries to evolve rent from this. He says that rent does not depend upon the mass of the agricultural product, but upon its value, [P. Dove, The Elements of Political Science, Edinburgh, 1854, p.279. — Ed.] however, this depends upon the mass and productivity of the non-agricultural population. But it is also true of every other product that it can only develop as a commodity partly as the mass and partly as the variety of other commodities which form equivalents for its increase. This has already been demonstrated in connection with the general presentation of value. [English edition: Vol. I, p. 88. — Ed.] On the one hand, the exchangeability of a product in general depends on the multiplicity of commodities existing in addition to it. On the other hand, on it depends in particular the quantity in which this product can be produced as a commodity.

No producer, whether industrial or agricultural, when considered by himself alone, produces value or commodities. His product becomes a value and a commodity only in the context of definite social interrelations. In the first place, in so far as it appears as the expression of social labour, hence in so far as the individual producer's labour-time counts as a part of the social labour-time in general; and, secondly, this social character of his labour appears impressed upon his product through its pecuniary character and through its general exchangeability determined by its price.

Therefore, if, on the one hand, surplus-value or, still more narrowly, the surplus-product in general is explained instead of rent, the mistake is made, on the other hand, of ascribing exclusively to agricultural products a characteristic which belongs to all products in their capacity as commodities and values. This is vulgarised still more by those who pass from the general determination of value over to the rea1isation of the value of a specific commodity. Every commodity can realise its value only in the process of circulation, and whether it realises its value, or to what extent it does so, depends on prevailing market conditions.

It is not a singularity of ground-rent, then, that agricultural products develop into, and as, values, i.e., that they confront other commodities as commodities, and that non-agricultural products confront them as commodities; or that they develop as specific expressions of social labour. The singularity of ground-rent is rather that together with the conditions in which agricultural products develop as values (commodities), and together with the conditions in which their values are realised, there also grows the power of landed property to appropriate an increasing portion of these values, which were created without its assistance; and so an increasing portion of surplus-value is transformed into ground-rent.


26. Nothing could he more comical than Hegel's development of private landed property. According to this, man as an individual must endow his will with reality as the soul of external nature, and must therefore take possession of this nature and make it his private property. If this were the destiny of the "individual", of man as an individual, it would follow that every human being must be a landowner, in order to become a real individual. Free private ownership of land, a very recent product, is according to Hegel, not a definite social relation, but a relation of man as an individual to "nature," an absolute right of man to appropriate all things (Hegel Philosophie des Rechts, Berlin 1840 p 79) This much at least is evident the individual cannot maintain himself as a landowner by his mere "will" against the will of another individual, who likewise wants to become a real individual by virtue of the same strip of land. It definitely requires some thing other than goodwill. Furthermore, it is absolutely impossible to determine where the "individual" draws the line for realising his will —whether this will requires for its realisation a whole country, or whether it requires a whole group of countries by whose appropriation "the supremacy of my will over the thing can be manifested." Here Hegel comes to a complete impasse. "The appropriation is of a very particular kind; I do not take possession of more than I touch with my body; but it is clear, on the other hand, that external things are more extensive than I can grasp. By thus having possession of such a thing, some other is thereby connected to it. I carry out the act of appropriation by means of my hand, but its scope can be extended" (p.90). But this other thing is again linked with still another and so the boundary within which my will, as the soul, can pour into the soil, disappears. "When I possess something, my mind at once passes over to the idea that not only this property in my immediate possession, but what is associated with it is also mine. Here positive right must decide, for nothing more can be deduced from the concept" (p. 91). This is an extraordinarily naive admission "of the concept", and proves that this concept which makes the blunder at the very outset of regarding as absolute a very definite legal view of landed property belonging to bourgeois society — understands "nothing" of the actual nature of this landed property. This contains at the same time the admission that "positive right" can, and must, alter its determinations as the requirements of social, i.e., economic, development change.

27. Very conservative agricultural chemists, such as Johnston, admit that a really rational agriculture is confronted everywhere with insurmountable barriers stemming from private property. So do writers who are ex professo advocates of the monopoly of private property in the world, for instance, Charles Comte in his two-volume work, which has as its special aim the defence of private property. "A nation," he says, "cannot attain to the degree of prosperity and power compatible with its nature, unless every portion of the soil nourishing it is assigned to that purpose which agrees best with the general interest. In order to give to its wealth a strong development, one sole and above all highly enlightened will should, if possible, take it upon itself to assign each piece of its domain its task and make every piece contribute to the prosperity of all others. But the existence of such a will ... would be incompatible with the division of the land into private plots — and with the authority guaranteed each owner to dispose of his property in an almost absolute manner. ["Traité de la propriété," Tome I, Paris, 1834, p. 228. — Ed.] Johnston, Comte, and others, only have in mind the necessity of tilling the land of a certain country as a whole, when they speak of a contradiction between property and a rational system of agronomy. But the dependence of the cultivation of particular agricultural products upon the fluctuations of market-prices, and the continual changes in this cultivation with these price fluctuations — the whole spirit of capitalist production, which is directed toward the immediate gain of money are in contradiction to agriculture, which has to minister to the entire range of permanent necessities of life required by the chain of successive generations. A striking illustration of this is furnished by the forests, which are only rarely managed in a way more or less corresponding to the interests of society as a whole, i.e., when they are not private property, but subject to the control of the state.

28. Misère de la Philosophie, p.165. There I have made a distinction between terre-matière and terre-capital. "The mere application of further outlays of capital to land already transformed into means of production increases land as capital without adding anything to land as matter, that is, to the extent of the land.... Land as capital is no more eternal than any other capital... Land as capital is fixed capital; but fixed capital gets used up just as much as circulating capital."

29. I say "can" because under certain circumstances this interest is regulated by the law of ground-rent and, therefore, can disappear, as in the case of competition between virgin lands of great natural fertility.

30. See James Anderson [A Calm Investigation of the Circumstances that have led to the Present Scarcity of Grain in Britain, London, 1801, pp.35-36, 38. — Ed.] and Carey, The Past, the Present, and the Future, Philadelphia, 1848, pp. 129-31. — Ed.

31. See the Anti-Corn Law Prize-Essays. However, the Corn Laws always kept prices at an artificially higher level. For the better placed tenants this was favourable. They profited from the passivity in which the protective duties kept the great mass of tenants who relied, with or without good reason, on the exceptional average price.

32. John C. Morton, The Forces Used in Agriculture. Lecture in the London Society of Arts, 1860, based upon authentic documents collected from about 100 tenants in 12 Scottish and 35 English counties.